Bessemer business sues Blue Cross

A Hoover man and his Bessemer construction company have filed a class action lawsuit against Blue Cross and Blue Shield of Alabama and its national trade association.

The antitrust suit, filed Tuesday on behalf of Fred R. Richards, Richards and Sons Construction Co. Inc. and all customers of the Birmingham-based insurer, alleges 37 members of the Chicago-based Blue Cross and Blue Shield Association conspired not to compete with the Alabama insurer.

The end result, according to the suit, was that the Alabama insurer was able to charge higher premiums and gain a 90 percent market share when its closest rival controls just 5 percent of the market.

On behalf of all the Alabama insurer’s customers, it seeks damages equal to three times the amount that premiums were “artificially inflated” since April 17, 2008.

Koko Mackin, vice president of corporate communications and community relations, said the suit lacked merit, noting the insurer has the fifth-lowest family premiums in the nation among all employers.

“Our company operates in compliance with a license from the Blue Cross and Blue Shield Association,” she said. “We comply with all state and federal laws and do not believe the allegations of the lawsuit have any merit.”

The suit comes after the insurer reported a $256.9 million profit last year, up 58 percent from 2010, as the BBJ reported last week. Mackin attributed that increase to lower-than-expected payouts due to the nation’s ailing economy.